Oct 06, Colombo: Sri Lanka and India finally will finalize the deal to set up a 500 MW coal power plant at Sampur in the Trincomalee district of the Eastern Province, during India's External Affairs Minister Salman Khurshid's visit to the island tomorrow.
Additional Secretary of the Power and Energy Ministry, Ranjith Gunawardena said the Sri Lankan and Indian parties have managed to finalize a power purchase agreement for the proposed 500MW coal power plant.
The joint venture plant between the Ceylon Electricity Board and India's National Thermal Power Corporation (NTPC) has been delayed due to disputes over several issues including the parameters that indicate the efficiency of the plant and maintenance fees.
NTPC Limited signed a Memorandum of Agreement with Government of Sri Lanka and Ceylon Electricity Board (CEB) for development of a 2X250 MW Coal based Power Project at Trincomalee in December 2006 and the project was to be developed through a joint venture company between NTPC and the CEB.
A Joint Venture company named Trincomalee Power Company Limited (TPCL) was incorporated in Colombo in September 2011 with equal equity participation from NTPC and CEB for the US$500 million investment to set up the two 250 MW coal based power plants in Sampur.
However, the discussions over technical parameters and power purchase agreement dragged on delaying the implementation of the project.
Following India's voting for the US-sponsored resolution against Sri Lanka, speculations were swirling in both countries that Sri Lanka would hand over the mega project to China.
Power and Energy Ministry official said that international tenders for the coal power plant project would be called soon after signing the agreement and the two, 250 MW coal power generators will be installed.
A 240 kilometer long 220 kV transmission line will be constructed from Sampur to the 20kV/132kV Grid Substations at Veyangoda to connect the power plant to the national grid. A coal unloading jetty will also be constructed in Sampur for coal shipments.
The Power and Energy Ministry expects to link the power plan to the national grid in 2017. The inking of power generation to the national grid is expected to minimize the CEB's dependence of purchasing power from private suppliers and the operation of fuel and thermal based power plants.
The project is expected to significantly enhance the generation capacity of the CEB and enable it to reduce average generation cost of a unit.